Advertise with Us

March 2018

Please fill in your details to download the Table of Contents of this report for free. We also do customization of these reports so you can write to us at mi@fibre2fashion.com in case you need any other additional information.

Improvements in some of the macroeconomic indicators are reflected in subdued CPI inflation; adequate FX buffers; stable exchange rate; low current account deficit despite a sharp decline in exports and an improved fiscal position, according to Second Quarterly Report for FY16 on the state of Pakistan's Economy by State Bank of Pakistan (SBP).

The Report says that the impact of oil price decline was felt directly on CPI inflation, which was pulled down to only 2.5 per cent during the period. Initial estimates suggest that timely rains and better input availability have reportedly improved per - acre harvest, increasing hopes for a bumper crop for the third straight year.

The encouraging aspect, the Report noted, is that the higher development spending did not impede the government's fiscal consolidation efforts, as the overall budget deficit dropped appreciably to 1.7 per cent of GDP in H1 - FY16 from 2.4 per cent of GDP in H1 - FY15.

The Report also stated that these official FX inflows helped in financing the current account deficit during the period, and compensated for insufficient private investment inflows. The overall current account deficit reached $1.4 billion during H1 - FY16, significantly lower than the $2.5 billion deficit recorded in the same period last year.

Pakistan's public external debt servicing obligations are not more than $6 billion per annum until 2020. This amount appears manageable, especially keeping in view the existing level of country's FX reserves and expected continuation of FX inflows.

To make Pakistan's growth more sustainable, the Report suggests that the cost of production and doing business has to be brought down; energy supplies must be smoothened further especially via investing in more broad-based and sustainable sources of generation and export-friendly industrial policies should be laid out. (MCJ)